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Wednesday, May 13, 2015

Caution: Do Not Waive the Attorney-Client Privilege

A recent court order in a case in Iowa reminded me of how
easy it is for employers to waive the attorney-client privilege by disclosing
(deliberately or inadvertently) the advice they receive from their attorneys. The
order shows that a careless reference indicating that a decision was based on
the “advice of counsel” opened the door and required the disclosure of
conversations between the attorney and the client. Whitney v. Franklin General Hospital (U.S. District Court for the
Northern District of Iowa, Ruling on Motion to Quash, April 23, 2015).

One of the oldest recognized privileges for confidential
information is the attorney-client privilege. The privilege protects communications
between the client and the attorney and keeps those communications
confidential. The attorney-client privilege is based on the premise that by
assuring confidentiality, the privilege will encourage clients to make full and
frank disclosures to their attorneys. As a result, attorneys are better able to
provide candid advice and effective representation to the client.

There are exceptions to the privilege. For instance, an
attorney can disclose information to prevent a crime. In addition, the
privilege may be waived. Here are some examples of how the privilege can be
lost in the employment context:

1. The
client or attorney discloses the communication to others: You are working
with your attorney on a termination of employment and the preparation of a Separation
Agreement for a problem employee. In an email, your attorney reviewed the facts
relating to the termination and the potential risks of the decision to
terminate the employee. In addition, your attorney asks you for some pay
information to complete the Agreement. You forward the email to your payroll
company. Because the communication was sent to a third party the communication
is most likely no longer privileged.

2. The
communication is made in the presence of individuals who are neither the
attorney nor the client: You are redecorating your offices. While in a
meeting with your designer (who is not an employee of the company), you receive
a telephone call from your attorney. Your attorney wants to discuss how you
will be handling a reduction in force. You put the attorney on speaker phone so
that you can continue to look at fabric samples with your designer. The
designer remains in the room during the conversation. Because the designer is
not an employee or agent of the company the privilege relating to the
conversation may be lost.

3. The
client provides information about what the attorney recommended: An
ex-employee has filed a charge of discrimination with the Equal Employment
Opportunity Commission. You decide that you can respond to the charge without
consulting your attorney. In your response, you state that you considered
options other than termination; however, your attorney recommended that you
terminate the employee and, based on that advice, you terminated the employee. Instead
of honoring the distinction between recommendations of counsel and the actual
reasons for the employment decision (the recommendations of counsel are
generally not the actual reasons for the termination) you may have lost the
privilege.

The attorney-client privilege is a valuable tool because it
allows employers to reduce the risk of litigation by seeking advice from
counsel who is familiar with the company, its policies, its operations, and its
practices. The examples above illustrate how easy it is to waive the
attorney-client privilege. Employers, and their attorneys, must be diligent in
order to preserve the attorney-client privilege.

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